But Prime Minister John Key said he categorically denied his Government was interested only in helping the rich, saying the Budget aimed to help a wide range of New Zealand families.
“I utterly reject those propositions. Twelve percent of households pay 76 percent of all net tax in New Zealand,” he said.
Get that: “all net tax in New Zealand.”
That claim is a complete lie.
The calculations Key is relying on exclude the over $15 billion that New Zealanders pay in GST, which is around 40% of the total tax taken from individuals in New Zealand. As I’ve said before:
Doing net tax calculations while excluding GST is like doing calorie counts while excluding nibbles, dessert, and drinks.
And, as I have noted both here at Polity and over at Pundit the other times National has tried to peddle this lie, GST is much more heavily loaded on lower income families, compared to income tax. That means including GST will markedly change how much “net tax” is estimated to come from various groups.
The Treasury has even warned English about the misleading effects of not including GST, and still the fibs keep showing up in National press releases.
When I did the correct calculations for National in 2011 – accounting for GST – I found that the top ~10% of households actually pay around 43% of the total net tax on individuals. They also earn around 30% of the income and have over 50% of the wealth.
That is a far cry from Key’s dishonest dog-whistle.
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